CVR ENERGY, INC (CVI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $44.50, CVR ENERGY, INC (CVI) is priced for +7.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/CVI

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.

Per-Model Detail (n=9)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Refining supplies about nine-tenths of revenue, but the unusual asset is a nitrogen fertilizer operation fed by pet coke from the Coffeyville refinery next door, a linkage the 10-K names as a risk when it warns about a failure "to continue to supply our Coffeyville Fertilizer Facility with pet coke".

• Operating profit came to about 1.8% of revenue over the trailing year and fell short of the interest bill, so the price is paying for that year to be the bottom rather than the run rate.

• Second quarter results are due July 29, 2026, the first full report under a chief executive appointed at the end of June.

Bull Case

Run a standard screen over this company and it comes back as a business that lost money. Trailing net income is negative, earnings per share is negative, and the methods that price a company off its earnings either return nothing or floor themselves at zero. That is an accurate description of the last twelve months and a poor description of the business. Refining income does not arrive smoothly. Over the past five years the operating line has averaged roughly 480 million a year with one-time charges added back; over the trailing twelve months it produced 133 million. A screen that stops there is measuring the trough and calling it the level.

The second thing a screen misses is that a tenth of the revenue has nothing to do with crack spreads. CVR Partners, the fertilizer business, buys "pet coke and natural gas for use in the fertilizer facilities through short-term, fixed price, and index price purchase contracts", and the pet coke comes from the refinery sitting beside the Coffeyville plant. That is a feedstock available only to a fertilizer plant that happens to sit next to a refinery its parent also owns. The product mix helps too. The 10-K explains that UAN "can be applied throughout the growing season and can be applied in tandem with pesticides and herbicides, providing farmers with flexibility and cost savings" and that it "typically commands a premium price to urea and ammonia, on a nitrogen equivalent basis". Fertilizer is a freight-heavy product, and geography compounds the advantage: the East Dubuque facility has an "advantaged location in the heart of the agriculture country" and ships substantially all of its output within 100 miles.

The third point is that the trough is not this company's alone. Among the refiners in the same cohort, PBF ran a 2.5% operating margin on 30.2 billion of trailing revenue, DK ran 2.3% on 10.7 billion, and CLMT came in slightly negative on 4.2 billion. Revenue fell year over year at all three. When an entire cohort earns two cents on the sales dollar at the same time, the cause is the spread environment rather than any one management team, and spread environments are the one thing in this industry that reliably changes.

Meanwhile the balance sheet has been kept in position to wait. In February the company issued a billion of new notes and used the proceeds to repay the term loan outright and retire the 8.500% notes that would have come due in 2029, pushing the nearest maturity out to 2031. Share count has not moved in four years, which is the part that cannot be faked: no equity was sold to fund any of this, so a recovery in refining margin accrues to the same holders who sat through the decline. No dividends were declared or paid during 2025, and the controlling holder gave up its share of them alongside everyone else. That is cash retention rather than distribution, which is what a cyclical business is supposed to do at the bottom.

Bear Case

The most consequential input at these refineries is not crude. It is a federal compliance credit. Refiners that do not blend enough renewable fuel themselves must buy credits to satisfy the Renewable Fuel Standard, and the 10-K states the exposure without softening it: the obligated subsidiaries face "market risk related to volatility in the price of RINs needed to comply with the RFS that are not otherwise generated through blending of renewable fuels in our refining and marketing operations". The same filing records that the cost of complying has "remained significant over the past several years", and that a dispute touching the RIN market, if resolved against the Wynnewood subsidiary, "could materially impact WRC's operations, financial condition, and cash flows". This is a line item set by policy and by a traded credit price, neither of which any operating improvement can influence.

Set that against what today's price asks for. The market is paying for company-wide operating growth held at the top of what the business can fund from its own cash flow, sustained for roughly six years. The pace by itself is not extraordinary; this company has produced it before. The duration is where the stretch sits. Of comparable fast-growers, only about 26% held that rate for six years. Six years of compounding at that ceiling would carry the trailing twelve-month operating profit of 133 million back past the roughly 480 million a year the business has averaged over five years. So the price is not underwriting a modest recovery. It is underwriting a full return to mid-cycle economics, arriving on a schedule.

The evidence so far runs the other way. The March 2026 quarterly filing reports a loss attributable to shareholders of $1.91 a share against $1.22 in the same quarter a year earlier, so the most recent print is worse than its comparable, not better. The renewable diesel venture, which the market once treated as a growth leg, "no longer meets the quantitative or qualitative requirements" to be reported as a separate segment and has been folded into other activity. A growth story that gets absorbed into a residual line has told you something.

The capital structure narrows the margin for error. February's refinancing was constructive and expensive at once: it retired the 8.500% notes and pushed maturities to 2031 and 2034, at the cost of a 25 million call premium plus 15 million of deferred financing fees, and the replacement paper carries 7.500% and 7.875% coupons. The interest bill on roughly 1.27 billion of net obligations does not pause while the cycle takes its time, and over the trailing year operating profit did not cover it. Beneath all of it, the accounting value of the equity is about 5.35 a share against a market quote of $33.35. In a good year that gap is irrelevant, because the earnings power is what matters. In a long bad one it is the floor, and the floor is a long way down.

Valuation

Begin with what the quote demands rather than what the company earned. At $33.35 on July 25, 2026, the market is paying for operating profit to compound at the top of what the business can fund internally and to keep doing so for about six years. Notably, it is not asking for a better margin than the company already produces; the margin embedded in the price is a shade under the 1.8% it delivered over the trailing year. The whole bet is on duration. Each additional percentage point of growth moves the required horizon by roughly two years, which is a useful way to see how sensitive the arithmetic is to assumptions nobody can verify in advance.

The methods used to triangulate the business disagree, and the shape of the disagreement is the informative part. The forward cash-flow approaches land essentially on top of the current price, but they arrive there by holding the exit multiple flat at today's 7.8 times EV/EBITDA in the base case, compressing to 4.0 times in the bear scenario and expanding to 12.8 times in the bull. Assume today's multiple survives five years and you get today's price back. That is the assumption, not the finding.

Inside the earnings-power group the two halves contradict each other, and the contradiction is the most honest thing in the exercise. Capitalize the five-year average operating profit with one-time charges added back, growth assumed at zero, and the business supports more than the market currently pays for it. Capitalize instead the 222 million of trailing free cash flow at the cost of equity, again with no growth, and the same lens lands far under the quote. Both are earnings-power reads. The only difference is which year you consider representative, which is the entire question in a cyclical business and one the arithmetic cannot settle. The asset-value lens is unambiguous and unflattering: shareholders' book value works out to about 5.35 a share.

A revenue-based comparison puts the business far above today's quote, but revenue is a weak yardstick for a refiner converting under two cents of it into operating profit. On the measure this sector is actually read by, enterprise value against EBITDA, the price sits roughly 47% above where the sector's own multiple lands on the 580 million of EBITDA the business generated. The peer set makes the point more concretely. PARR turned 8.2% of a nearly identical 7.5 billion of trailing revenue into operating profit; this company turned 1.8% of its own into the same line. Same industry, same revenue scale, and a gap that is either configuration or timing. PBF, four times larger at 30.2 billion of revenue, managed 2.5%, which suggests the environment is doing most of the work.

Solvency sets the clock. Liquid assets stood at 512 million against roughly 1.27 billion of net obligations, share count has not moved since March 2022, and the February refinancing bought several years of runway before the next maturity. What it did not buy is speed. The balance sheet can carry a wait; it cannot shorten one, and the length of the wait is what the price is quietly assuming.

Catalysts

The next scheduled information event is the second quarter report, due after the close on July 29, 2026. It will be the first full quarter reported under Dane Neumann, promoted to chief executive at the end of June from the executive vice president and chief financial officer role, alongside broader leadership changes at both CVR Energy and CVR Partners. Management transitions at cyclical companies matter less for strategy than for capital allocation, and this one arrives with the dividend suspended and the refinancing just completed.

The refinancing itself is the concrete change to the cost base. On February 12, 2026 the company issued a billion in aggregate principal, split between 600 million of 7.500% senior notes due 2031 and 400 million of 7.875% senior notes due 2034, and used the proceeds to repay the term loan in full, redeem all of the 8.500% notes due 2029, and retire 217 million of the 5.750% notes due 2028. The trade was a lower headline coupon and a longer maturity ladder, paid for with a 25 million call premium and 15 million of deferred financing costs. From here the interest line is fixed and known, which removes one variable from a business that has plenty of others.

Two things are worth watching in the segment disclosures rather than the headline. First, the renewables business lost its separate reporting status in the first quarter of 2026 and now sits inside other activity, so any judgment about that investment has to be made from aggregate figures going forward. Second, the fertilizer side runs on planned outage schedules that move earnings between quarters, and the 10-K attributes part of the prior period's comparison to a 14-day planned outage at the Coffeyville facility. On the sell side, Mizuho lowered its target on the shares to 28 dollars from 35 and kept an underperform rating on July 7, 2026.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• PBF (PBF ENERGY INC.)
• FY2025 10-K: …refiners that import products into the United States and with producers and marketers in other industries supplying alternative forms of energy and fuels to satisfy the requirements of industrial, commercial and individual consumers. Some of our competitors have expanded the capacity of their refineries and…
• FY2025 10-K: …gross margin and a reconciliation of gross refining margin, and gross refining margin excluding special items, to the most directly comparable GAAP financial measure, consolidated gross margin, on a historical basis, as applicable, for each of the periods indicated (in millions, except per barrel amounts): Year Ended…
• DK (DELEK US HOLDINGS, INC.)
• FY2025 10-K: …RINs at fixed prices and quantities, which are used to manage our RINs Obligation. Additionally, from a sourcing perspective, we often enter into purchase and sale contracts with vendors and customers or take physical or financial commodity positions for crude oil that may not be used immediately in production, but…
• FY2025 10-K: …crude oil and refined products transported through our pipelines and sold through our terminals and to third parties is directly affected by the level of supply and demand for all of such products in the markets served directly or indirectly by our assets. Supply and demand for such products fluctuates during the…
• CLMT (Calumet, Inc. /DE)
• FY2025 10-K: …the carrying value of those assets. Any additional impairment charges that we may take in the future could be material to our results of operations and financial condition. Competition in our industries is intense, and an increase in competition in the markets in which we sell our products could adversely affect our…
• FY2025 10-K: Specialties Products and Solutions and Performance Brands segments, we continue to benefit from an attractive specialty product margin environment. Compared to the third quarter, our fuels and asphalt business benefitted from improved commodity margins. Demand for our products in these businesses remained strong in…
• PARR (Par Pacific Holdings, Inc.)
• FY2025 10-K: …the components of Adjusted EBITDA made during 2025. (2) For the year ended December 31, 2023, there was no impact in Operating Income from accounting policy differences at our refining and logistics investments. Discussion of Operating Income by Segment Year Ended December 31, 2025 Compared to Year Ended December 31,…
• FY2025 10-K: 6.6 million in environmental expenses, and $5.7 million in other expenses, and an increase of $4.0 million in third party revenue. These improvements were partially offset by an $11.8 million in rent expense, $5.5 million related to lower throughput, and $4.1 million of reduced gross margin related to the Wyoming…
• IMO (IMPERIAL OIL LIMITED)
• FY2025 10-K: …businesses, selectively investing for resilient and advantaged returns, operating efficiently and effectively, and providing quality, valued and differentiated products and services to customers. The company owns and operates three refineries in Canada with aggregate distillation capacity of 434,000 barrels per day.…
• FY2025 10-K: …and exploration expenditures were primarily related to sustaining activity in support of the company's oil sands and in-situ assets. For the Downstream segment, capital expenditures were primarily for completing the Strathcona renewable diesel facility as well as other refinery and distribution projects to improve…
• IEP (ICAHN ENTERPRISES L.P.)
• FY2025 10-K: …consumer cyclical sectors of $375 million, offset in part by gains in the utilities sector of $190 million. Energy Our Energy segment is primarily engaged in the petroleum refining, renewable fuels and nitrogen fertilizer manufacturing businesses. The petroleum business accounted for approximately 90%, 91% and 89% of…
• FY2025 10-K: …the petroleum business' transportation fuel decreases as a result of the use of increasing volumes of renewable fuels, increased fuel economy as a result of new EPA fuel economy standards, or other factors, the impact on our Energy segment's business could be material. If sufficient RINs are unavailable for purchase,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.